2013 PNG Budget Features $238.5 Million Stimulus Package
By Frank Senge Kolma
PORT MORESBY, Papua New Guinea (The National, Nov. 20, 2012) – Prime Minister Peter O’Neill last night unveiled an exclusive stimulus package for PNG businesses which he projected will create 500,000 new businesses and two million jobs by 2050.
The 2013 Budget, which would be handed down today, would contain the first K80 million [US$38.2 million] out of a K500 million [US$238.5 million] stimulus package to empower the small-medium enterprises sector.
O’Neill announced the small and medium enterprises stimulus package last night to a packed house at the Dynasty Restaurant in Port Moresby. Among others, the package would:
The prime minister said interest rate at the National Development Bank (NDB) would be lowered from highs of 22% to 6% as part of the package.
A foreign investment review board would consider all foreign businesses wanting to set up in the country and only those approved by the board would be allowed to register to carry on business in the country.
Of the K80 million parked in the NDB next year, no less than one-third of this amount would be reserved for aspiring women entrepreneurs to access.
"After 37 years of independence, only 10% of the formal economy is owned and controlled by our citizens while 90% is controlled by outsiders," the prime minister said.
"This means that more than two million people, who could be gainfully engaged or owning a small-medium enterprise in our formal sector, find themselves missing out."
He said the government had not provided opportunities for the people’s full and productive engagement in becoming owners and beneficiaries and that his government was committed to reversing this trend.
Sir Nagora Bogan, chair of the PNG Indigenous Business Council, said "this is a special night for PNG entrepreneurs."
"The stimulus package is a paradigm shift, to empower our people to become masters of their own destiny. It is businesses that will transform this country, and this is just the tonic, the platform we need," Sir Nagora said.
The package initiative emanated from the Alotau Accord, which had now become the government’s socio-economic blueprint, and from the Kokopo Indigenous Business Summit.
The package would comprise a small part of the 2013 Budget which Treasurer Don Polye is expected to hand down at 2pm today.
O’Neill reiterated earlier pronouncements that the budget would be in the deficit.
"We will go into a small deficit," he said. "There’s nothing to panic about. It will be an innovative budget and it will be people-focused."
He said much of the money would be frontloaded to the provinces and districts for essential development projects under strict guidelines.
No less than K3 billion [US$1.4 billion] had been promised for infrastructure projects right across the country and in the provinces.
O’Neill received a standing ovation at the conclusion of his speech last night.
Traditionally, after the budget is handed down, parliament would be adjourned for seven days in order to give the opposition the opportunity to reply before debate and eventual passage of the budget.
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